OUTLINE:

Objective
Background of competition
act
The competition Act.
Competition Commission of
India
Duties, Powers , Functions
and Penalties
Distinction between MRTP
and Competition act

Competition
Is a situation in a market in which
firms or sellers independently strive
for the buyers patronage in order to
achieve a particular business objective
for example, profits, sales or market
share



Benefits of Competition

Companies : Efficiency, cost-saving
operations, better utilization of
resources, etc.

The Consumer : Wider choice of goods
at competitive prices
The Government : Generates revenue




BACKGROUND of Competition Law



MRTP Act came into force (1970), limited
provisions existed under :
The Indian Contract Act
Directive Principles of State Policy (Non-
enforceable)

The MRTP Act brought in a four-pronged thrust :
Concentration of economic power
Restrictive Trade Practices
Monopolistic Trade Practices
Unfair Trade Practices



Post 1991 policy of Liberalization, Privatization
and Globalization introduced.
MRTP Act was found inadequate to meet the
challenges of a modern globalize economy.
Government of India in October 1999
appointed a high level Committee on
Competition Policy and Law (the Raghavan
Committee) to advise on the competition law in
consonance with international developments.
Competition Law was Introduced in the year
2002.



Competition law
It extends to the whole of India except the
State of Jammu and Kashmir.
An Act to provide, keeping in view of the
economic development of the country, for the
establishment of a Commission
to prevent practices having adverse effect on
competition,
to promote and sustain competition in markets,
to protect the interests of consumers and to
ensure freedom of trade carried on by other
participants in markets, in India, and for matters
connected therewith or incidental thereto.



Competition Law

Competition Law generally covers 3
areas:

1. Anti - Competitive Agreements,
e.g., cartels,

2. Abuse of Dominant Position by
enterprises, e.g., predatory pricing,
barriers to entry and

3. Regulation of Mergers and
Acquisitions (M&As).
OBJECTIVES OF COMPETITION LAW
Promoting economic efficiency in both
static and dynamic sense
Protecting consumers from the undue
exercise of market power
Facilitating economic liberalization,
including privatization. Deregulation and
reduction of external trade barriers
Preserving and promoting the sound
development of a market economy
Cont

Ensuring fairness and equity in market
place transactions

Protecting the public interest
including in some cases considerations
relating to industrial competitiveness
and employment

Protecting opportunities for small and
medium business
Anti-competitive agreements

No enterprise or association of
enterprises or person or association of
persons shall enter into any agreement
in respect of production, supply,
distribution, storage, acquisition or
control of goods or provision of services,
which causes or is likely to cause an
appreciable adverse effect on
competition within India.

Abuse of dominant position
"dominant position" means a position of
strength, enjoyed by an enterprise, in the
relevant market, in India, which enables it to
(i) operate independently of competitive
forces prevailing in the relevant market; or
(ii) affect its competitors or consumers or
the relevant market in its favour.

combinations

Regulation of combinations
No person or enterprise shall
enter into a combination which
causes or is likely to cause an
appreciable adverse effect on
competition

EXEMPTIONS

GOVT BY NOTIFICATION MAY EXEMPT FROM THE COMPETITION LAW
ANY CLASS OF ENTERPRISES IN THE INTEREST OF
NATIONAL SECURITY/PUBLIC INTEREST.
ANY PRACTICE/AGREEMENT ARISING OUT OF
INTERNATIONAL TREATY/AGREEMENT
ANY ENTERPRISE PERFORMING A SOVEREIGN
FUNCTION ON BEHALF OF GOVERNMENT
DIFFERENT PROVISIONS FROM DIFFERENT DATES IF,
NEED BE.

Competition Commission Of India
Central Government has appointed CCI as a
governing Body.
The commission shall be a body corporate by the
name aforesaid having perpetual succession and a
common seal with power, subject to the provisions
of this Act, to acquire, hold and dispose of
property, both movable and immovable.
The head office of the Commission shall be at
such place as the Central Government may decide
from time to time (New Delhi)
CCI (Competition commission of India) may also
assign office in other places in India.

Composition of Commission
The Commission has a Chairperson and six
members.

The Chairperson and other Members of the
Commission shall be appointed by the
Central Government.

Selection Committee includes Chief Justice
of India or his nominee, Secretary in the
Ministry of Corporate Affairs

PENALITIES
If any person, without reasonable clause, fails to
comply with the orders or directions of the act,
he shall be punishable with fine which may
extend to rupees 1 Lac for each day during
which such non-compliance occurs, subject to a
maximum of rupees 10 Cr, as the Commission
may determine.

If any person does not comply with the orders
or directions issued, or fails to pay the fine
imposed be punishable with imprisonment for a
term which may extend to 3 years, or with fine
which may extend to rupees 25 CR.



18
OLD WINE OR NEW WINE ?

MRTP ACT
BASED ON PRE-1991 LPG
PREMISED ON SIZE
PROCEDURE ORIENTED
COVERS UNFAIR TRADE
PRACTICES (INDIVIDUAL
CONSUMER INTEREST)
POLITICAL
APPOINTMENTS OF
CHAIRPERSON/MEMBERS


NEW LAW
BASED ON POST-1991
LPG
PREMISED ON
BEHAVIOUR/ CONDUCT
RESULT ORIENTED.
UNFAIR TRADE
PRACTICES EXCLUDED
(COVERED UNDER
CONSUMER PROTECTION
ACT)
APPOINTMENTS BY A
COLLEGIUM